image courtesy of Getty Images As the government begins to wind down its main job support scheme on Thursday, employers will be responsible for a greater share of the costs of furlough. The adjustment will effect thousands of businesses around the country, with approximately 1.5 million workers still on furlough. Employees will continue to receive 80% of their salary, but for the first time, employers will pay a portion of it. According to one think tank, this could lead to layoffs, with older workers being more vulnerable. What effect did the furlough program have? What will the furlough look like on July 1st, and when will it end? MPs demand that all companies receiving furlough money be named. According to the Institute for Fiscal Studies, the cost of maintaining a member of staff on the plan will climb from £155 per month in July to £322 in August and September, covering charges such as National Insurance. As a result, the IFS predicts that businesses will reevaluate whether or not to keep employees. “Rather than striving to maintain every job on life support, the furlough system should be phased down as the economy recovers.” “However, this does mean that some people may lose their jobs,” Tom Waters, a senior research economist at the IFS, warned. Employers must pay 10% of their furloughed workers’ customary wage beginning July 1, while the government will continue to pay the remaining 70%. The employers’ contribution will increase to 20% on August 1st, but the government’s contribution will be reduced even more. Continue reading The Coronavirus Job Retention Scheme, as it is formally known, has cost the government £66 billion and has sustained 11.2 million jobs since March 2020. More over a third of firms still had employees on furlough at the end of March this year. Many of those workers have been able to return after the progressive opening up of non-essential retail and substantial areas of the hotel sector. Only around one out of every twenty workers employed by enterprises is now totally or partially furloughed. Some workers in industries that have been struck particularly hard by pandemic-fighting efforts, such as nightclubs and international travel, have been furloughed for months. Gemma Walker’s image is licensed under a Creative Commons Attribution-Noncommercial- Gemma Walker, 36, from Bradford, enjoys her job as a Newmarket Holidays account manager. But it’s been 15 months since she’s seen a client or entered the office. She recognizes that the scheme has been a lifeline for the company, but she admits that the experience has been difficult for her. “I felt an awful sense of remorse for my Newmarket colleagues who were still working,” she recalls. “They’ve done a fantastic job of holding down the fort for the rest of our team.” She used to travel all over the United States, meeting with clients and attending conferences. “You almost feel lost when something like that is taken away from you,” she says. “My mission is no longer relevant because this is what I’ve been working towards since I was 17 years old.” “I went through a phase where I had to make sure I set an alarm every morning when I got up,” she recalls. “You have to get into the mindset of ‘I have to keep moving, I have to do something,’ because you never know when you’ll be back.” Furloughs have been hailed for giving workers a sense of security. Despite early concerns that the epidemic would pull the rug out from under the economy, unemployment has stayed below 5%. Employers hailed the program as a method to retain skilled and competent employees who they wanted to keep on board when they were ready to reopen. Newmarket Holidays’ chief financial officer, Mark Vincent, said, “We’ve tried to retain as many staff as possible.” “The furlough program has been quite beneficial. It’s one of the factors that determines whether you live or die.” However, he believes that travel companies, which have had two summers of interrupted activity, may need to rethink their employment levels. “We’re all going to be losing money over the winter months, so we’ll have to rethink how we staff.” The owner of the pub company TLC Inns, Steve Haslam, is skeptical of the benefits of furlough. “I am extremely grateful to the government for helping my team because, thanks to the government’s support, my staff were able to live and pay their bills while on furlough.” Holly Haslam (c)Holly Haslam (c)Holly Haslam (c) However, he claims that it hasn’t helped him retain employees. “A lot of people didn’t return to work… because they didn’t want to, either because they didn’t want to come back into the sector or because they’d gone out and sought second occupations.” We had a place where 80 percent of the employees had left.” He believes that the end of furloughs will make it easier for firms like his to hire additional employees. The majority of people on furlough at the outset of the epidemic were in their early twenties. They were employees in the hotel, travel, arts, and leisure industries. However, with the reopening of the economy, many younger workers have returned to work. According to the Resolution Foundation, almost half of those still on furlough are over 45. According to the think tank, if businesses opt to restructure in the face of uncertainty, older workers on furlough are now more likely to be laid off. “The reopening of the economy has resulted in a spike in people returning to work from furlough, particularly young people in sectors such as hospitality and leisure,” according to Karl Handscomb, senior economist at the Resolution Foundation. “However, not everyone has returned to work. Over one-fourth of older workers who were furloughed during the previous shutdown remained on furlough during the reopening, putting them at risk of losing their jobs when the scheme is undone.” Job Retention Program Pandemic of Coronavirus Employment/n
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